The arrival of Intel 7nm processors to the market will be delayed for another six months, according to the company’s announcement in the presentation of some quarterly financial results that despite being quite good with a significant increase in income and profits, they have not prevented a 6% drop in shares in off-market operations.
Intel’s 7nm processors are delayed again, will accumulate at least 18 months above the initial release date, and will not be available until the end of 2022 or 2023. EIntel CEO Bob Swan says the delay is due to a defect the company identified in the fabrication process and that it affected the performance of the chips.
The company has started a contingency plan that will involve use of third party manufacturers to cover demand and the repeated delays in the supply of CPUs for PCs for which the company apologized in late 2019. Intel has been “stuck” in the transition to 10nm manufacturing technology processes for years, and surely many of today’s problems stem from it. To put the situation in perspective, the initial plans (in 2014) were to put the 10nm chips on the market in 2015 and the 7nm chips in 2017.
In an attempt to normalize the situation and meet demand, Intel has increased the proprietary manufacturing capacity of 14nm wafers and the use of third-party foundries. Intel has in the past outsourced the supply of basic chip components to foundries like TSMC, but it was the first time that the American giant turned to outside companies to manufacture their main processors.
Intel’s situation is complicated. AMD has 7nm processors on the market like the successful Ryzen that have gained ground to Intel in all market segments and are being used by all major manufacturers, while ARM (also at 7nm) continues to enter the market of the PC and Apple’s silicone announcement may put the x86 platform on the ropes.
Competition has also increased in data center chips that Intel has monopolized in the past. NVIDIA outperformed Intel in market capitalization for the first time in history and they are expanding their business model to the business segment, workstations, servers, in addition to others such as the automotive or Artificial Intelligence segment.
Good financial results
Despite all of the above, Intel has exceeded analyst expectations at the income level with a strong year-on-year increase of 20% and that of profits by 16%. Intel updated its revenue guidance for the full year 2020 to $ 75 billion against analyst estimates of $ 73.86 billion.
Of course, the chip giant has cash, technology, personnel and ultimately ability to overcome the current situation. And it is on the way to update its entire catalog with important news that will be presented on September 2. Innovations such as the Tiger Lake and the new integrated and dedicated Intel Xe graphics are expected.
The first 10nm Alder Lake will not be available until next year, while the 7nm processors will not arrive until late 2022 or early 2023. By then, the rest of manufacturers have advanced to technological processes of 5 and 3 nm. Intel has a lot of work ahead of it.